“I’m so grateful that I was able to get through it as quickly as we did, when I know friends have had long gaps between IVF rounds because they had to save money,” says Isobel, who works for a charity based in London. . “I didn’t have to think about how much it cost, which really took the pressure off.” The pandemic had also made her acutely aware of her parents’ mortality, worrying that they might not live to see any grandchildren. So she and her partner gratefully accepted their offer. It is not the first time that family money has helped her. Isobel’s parents inherited inheritances from their own parents in their 50s, which helped them give her ‘living gifts’. They helped her buy a house in London when she was 27 and paid off her student loan when she was 22 so she could start saving for a pension. “When I think about the money that goes into this pension, it starts a whole cycle of benefits again,” says Isobel. While she couldn’t be more grateful for her parents’ life-changing generosity, like many recipients of family money, she’s not comfortable discussing it publicly. Isobel is not her real name and has not spoken to her colleagues about how she came to buy a house at such a young age. It was awkward, she admits, when they started doing Zoom meetings from home during the pandemic and everyone could see where she lived. “It doesn’t feel fair – and it makes you feel guilty.” Britain is entering a golden age of inheritance as the trillions amassed by the post-war baby-boom generation begin to trickle down to their children and grandchildren in what has been dubbed the great transfer of wealth. By 2025, £100 billion – more than half of the NHS’s annual budget – could change hands every year, according to a landmark analysis commissioned by estate managers Kings Court Trust. By 2047, they estimate that number could more than triple. Around £5.5 trillion in total could flow through families over the next 30 years, in both conventional inheritances and living gifts like Isobel’s, which attract no inheritance tax if the donor survives for seven years after they are given. In wealthy families, these may be part of a carefully planned strategy to reduce death duties, often channeled into property or school fees. “As a grandparent, have you considered investing in your grandchild’s education instead of paying 40% inheritance tax?” asks the fee-paying Bolton school’s website, brazenly suggesting it’s a way to “leave a worthy bequest while avoiding giving away a lifetime of earnings to the taxman!” But wealth transfers are not limited to the rich. Research into lifetime gifting by HMRC found that almost a quarter of over-70s had helped their children financially in the past two years alone, with the urge to help so strong that some took on debt to do so. Half of first-time buyers have financial help from family, according to the annual Bank of Mum and Dad report by financial services firm Legal & General, while around a third of grandparents plan to help grandchildren with university . A generation that enjoyed free education and could become homeowners even on relatively modest incomes is watching with alarm as its children struggle to reach the same milestones and get in, if they can. When people say our generation is having a terrible time, the gap is between those who have and have not inherited wealth The sums involved in the great transfer of wealth are so astonishingly high, partly because the so-called boomers make up such a large part of the population – about a fifth – but partly because they have been lucky. Historically, it is perfectly normal for older people to be wealthier than younger people, having had a lifetime to accumulate wealth, pensions and savings. What happened to these assets over a generation, however, is unusual. House prices tripled in real terms between 1980 and 2020, and even a council house bought through Margaret Thatcher’s Right to Buy can be worth seven figures in some London postcodes. One in four pensioner households are now worth more than £1m on paper, even if they are not cash-rich. Now that windfall is headed to the next generation – or some of them. As analysis by the Kings Court Trust warns, there is a “deep and widening gap” between younger people who expect to be left something and those who are painfully aware they won’t, in a world where family money is increasingly critical for life opportunities. Research for the Institute for Fiscal Studies thinktank last year showed that for children born in the 1960s, a quarter of the gap in living standards between rich and poor was explained solely by inherited capital. For children of the 80s, a third is. And the harder it feels to make it through tough financial times, the more inherited wealth can be hurt, making it a great source of guilt, competition, and sometimes intense resentment. Last summer, New York magazine rather melodramatically asked, “Will the Great Wealth Transfer spark a millennial civil war?”, arguing that the supposed generational conflict between boomers and millennials may soon turn into a conflict between young people who have and which have not. It’s something Isobel is worried about. “Of my friends who have bought houses, most have taken money from their parents,” he says. “When people talk about our generation having a terrible time, I think the divide is between people who have and don’t have inherited wealth.” No wonder inheritance has become the dirty secret of the middle class, harder to talk about than sex. A child of Nigerian immigrant parents, writer Otegha Uwagba did not grow up with money. But winning a full scholarship to a private school and then going to Oxford brought her into contact with a very different social circle. In her best-selling memoir We Need To Talk About Money, she describes her young friends’ surprising candor about how they became homeowners in their 20s: “Few people come forward to note the often huge inheritances that come with these purchases. Instead, we see Instagram photos of beaming twenty-somethings standing proudly on the steps of their new home or engaging in polite dinner conversations about paint samples and mid-century Ercol furniture, even as we silently wonder, “How?” confused. , Uwagba, the Uwagba. A friend once asked how she had secured a mortgage at just 24 years old. It turned out that the woman’s parents had bought the apartment outright, and she was just pretending that she needed a loan. “I think people are ashamed to share the reality of any form of privilege, whether it’s racial or gender or economic. They think it diminishes them,” says Uwagba. After all, they didn’t succeed on merit. “The intergenerational gift is sensitive,” sociologists Liz Moor and Sam Friedman write in a research paper examining how people whose parents helped them buy justify their good fortune. “It can cause feelings of guilt, embarrassment, even shame, and therefore is often not spoken about in everyday life.” Some of the heirs interviewed felt judged by friends for not making it on their own, while those with leftist views tried to reconcile personal gratitude with political consciousness. Participants tended to say inheritance tax was good, but mostly if it fell on people richer than them. Moor, who set out to examine why there isn’t more societal pressure to tax inherited wealth, says respondents tended to defend themselves by citing the working-class roots of money-making relatives generations ago. “People could find a way to reconcile belief in meritocracy with receiving unearned income, making that connection to upward social mobility over time,” he says. “It’s a bit self-serving, but it lends itself to the status quo when you can say, ‘Yeah, but it was working-class grandparents selling their bungalow that helped me buy my flat.’ What they struggled to explain. far was the difference between them and friends in similar jobs who could not afford to buy. One interviewee, Alicia, simply hid the fact that she had bought her apartment outright. As Uwagba points out, this shameful silence just leaves those without family money to beat themselves up about why they can’t seem to get their lives together when the truth is that their friends really haven’t either. they just have parents who did. For most of her 20s she assumed financial success was “a matter of working hard, getting higher in the career,” but not anymore: “If I can’t figure it out, I just assume it’s family money, and that’s a good rule of thumb, especially with people who work in the media and publish.” Wealth acquired young, he points out, has a strong multiplier effect. Pay off your student loan and you can save for a deposit early. The sooner you buy property, the sooner the money that would have gone towards renting to build assets that your own children may inherit. Wealth begets wealth, so much so that a study tracing the descendants of wealthy Victorians found their great-grandchildren were still disproportionately likely to be well-off five generations later. Some of Uwagba’s contemporaries had their education funded by grandparents: “Well now you…
